< The 2014 All-Japan Research Team
Seizing the No. 3 position for a third year running is Daiwa Securities Group’s Kazuhiro Miyake, who is bullish on the long-term prospects for Japanese equities. The Nikkei 225 Stock Average rocketed 56.7 percent last year but had given back 12.1 percent in volatile trading by mid-March, settling at 14,327.66. Miyake forecasts a gain of 10 to 20 percent in 2014, despite slowing momentum from April’s sales tax hike, and expects to see what he terms a “serious peak” around 2020. Bolstering his outlook, the strategist says, are the Bank of Japan’s “highly accommodative” stance and a Shinzo Abe administration that will likely last long enough for “smooth implementation” of the prime minister’s initiatives. Citing also “the revival of Japanese companies that have weathered the extremely tough operating environment over the past 20 years,” the strategist argues for “the strong likelihood that the mid-, long- and ultralong-term Japanese economic cycles have simultaneously entered the upside.” His year-end target for the Nikkei 225 is 18,500 if the yen trades at 105 per dollar and 20,000 if it slumps to 110; the currency was changing hands at 102.45 in mid-March. Assuming continued yen weakness, Miyake recommends sectors whose companies are enjoying success in Europe and the U.S., such as Japanese manufacturers of autos, auto parts and tires. He also prefers contractors, financials, information services providers and real estate names, which will benefit from a likely long-term upswing in the Japanese building cycle. The analyst garners particular investor support for his client service. Miyake “is always very responsive to our questions and requests,” affirms one backer. |